Edmonton is possibly weeks away from establishing a Dedicated Renewal Fund (DRF) after the city’s infrastructure committee recently greenlit the idea. The fund is intended to mirror other renewal funds including those for neighbourhoods (2009) and alleyways (2018), plans that have since been replicated in other municipalities.
Why is the city trying to create a DRF?
Officials say between 2023 and 2026 unconstrained funding from other governments was only 57.5 per cent of what was needed to keep up with renewal. Between now and 2030, an estimated $2.8 billion will be needed in Edmonton for infrastructure repairs for everything from swimming pools to arterial roads.
Mayor Andrew Knack has asked rhetorically if the City of Edmonton should rely on “inconsistent funding from other orders of government.” In answer to his own question, the mayor has stated that Edmonton needs to “build in a funding program that allows us to maintain what we have.”
What’s the plan?
Once the Financial Stabilization Reserve (FSR) and Pay as You Go (PAYGO) funds are replenished, which is expected to be done by 2030, the city will redirect revenue — backfilling those two accounts towards the DRF. Knack said that would enable the city to focus on long-term infrastructure repairs instead of having to pick and choose what gets fixed every budget.
The mayor compares the plan to that for a household.
“If you’re able to, the best thing is to set aside money for proper maintenance of everything in your home,” said Knack. “You don’t wait for the shingles on your roof to fail. You’ve got to replace your furnace filters to make sure it lasts.”
How does the city intend to fund DRF?
In the same way as other renewal funds, ratepayers will pay an additional 0.5 per cent property tax per year from 2027 to 2029, which will first be applied to FSR and PAYGO. This levy will increase to 0.75 per cent from 2030 to 2032 and then a one per cent increase from 2033 until the DRF reaches its target. That target will need to put a dent into an annual renewal need of $2.7 billion per year by 2046.
Knack said the city could build the fund up more aggressively, like with the alleyway fund, but council is concerned that would put too much burden on ratepayers.
The mayor added that if infrastructure funding from the province and/or federal governments increases, the program could be sped up.
Under current projections, the city could potentially start using the DRF to fill infrastructure gaps by 2029.
So property taxes are going up?
Technically yes, but no more than they were already. The city’s long-term plan is to direct future growth inwards instead of building more urban sprawl — a major contributor to long-term property tax increases. In theory, repairing infrastructure routinely with this fund instead of waiting for it to reach crisis mode will be cheaper.
“Dedicated renewal means proper life cycle maintenance,” said Knack. “It means doing the proper upkeep, getting the maximum value of the tax dollar and replacing it at the appropriate time.”
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